T-Minus 1: Setting EUR Expectations for Tomorrow’s ECB Meeting
- EURUSD maintains trend structure from December 17.
- EURGBP triangle remains valid below 0.7750.
- See the DailyFX Economic Calendar for Wednesday, January 21, 2015.
The hurdles for tomorrow's ECB meeting are rather high. Evidence of incoming action has undoubtedly cropped up, with reasons for a massive stimulus program coming from all angles:
- The European Court of Justice last week (essentially) ruled that there were no major legal hurdles between the ECB and a QE program.
- The Swiss National Bank's surprise decision to remove the EURCHF floor in the face of rising costs of maintaining the floor.
- Draghi's preferred market-measure of inflation slumped below 1.200% by the end of last week.
- The ECB balance sheet is mostly unchanged over the past month; the TLTROs and ABS program have been insufficient.
--- Written by Christopher Vecchio, Currency Strategist
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